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News and Views from the Global SouthFri, 13 Sep 2019 21:17:01 +0000en-UShourly1https://wordpress.org/?v=4.8.10They Call it Multistakeholderism. Where Does That Leave the UN?http://www.ipsnews.net/2019/09/call-multistakeholderism-leave-un/?utm_source=rss&utm_medium=rss&utm_campaign=call-multistakeholderism-leave-un
http://www.ipsnews.net/2019/09/call-multistakeholderism-leave-un/#respondWed, 04 Sep 2019 06:34:30 +0000Harris Gleckmanhttp://www.ipsnews.net/?p=163092Global governance is slipping away from the United Nations. Whether it is in managing the Internet, where the UN’s governing structure offers only an advisory role for governments; or climate change, where the most exciting actions are now corporate-led partnerships outside the UN Framework Convention on Climate Change; or the Gates Foundation-sponsored Gavi, The Vaccine […]

The United Nations headquarters showcasing the Sustainable Development summit, September 2015. The essayist, an expert in governance and democracy, bemoans the growing participation of multinational corporations in UN system forums. Credit: CIA PAK/UN PHOTO

By Harris GleckmanUNITED NATIONS, Sep 4 2019 (IPS)

Global governance is slipping away from the United Nations.

Whether it is in managing the Internet, where the UN’s governing structure offers only an advisory role for governments; or climate change, where the most exciting actions are now corporate-led partnerships outside the UN Framework Convention on Climate Change; or the Gates Foundation-sponsored Gavi, The Vaccine Alliance, which is in a tug of war with the World Health Assembly on who sets health policy in developing countries, the institutional basis for global decision-making is changing.

Where nongovernmental organizations (NGOs) were once the largest nonstate entities attending UN system meetings, transnational corporations have become the biggest players. They participate in well-attended public-private partnership sessions at the UN Conference on Trade and Development, the Human Rights Council and the High-Level Political Forum, the key body for following up on the Sustainable Development Goals.

The latest institutional foray is a World Economic Forum-UN partnership agreement. Under this arrangement, senior UN leaders are invited at national, regional and international levels to interact with forum members, many of whom are actually causing the global problems that the UN system is tasked to fix, such as climate change.

These developments are part of a new global governance approach, one in which a team of corporate executives, leaders of civil society organizations (CSOs) , officials from governments and the UN system, academics and other players take on the governance of a specific international challenge.

In the economic, social and environmental fields, this governance arrangement is called multistakeholderism, as each new global decision-maker is said to represent a “stakeholder” in an issue. In practice, these governance arrangements can have a role equal to or greater than the one held by the intergovernmental body officially assigned to address a universal problem.

These experiments in a new form of global governance and the 2010 report on the Global Redesign Initiative by the World Economic Forum run counter to efforts to enhance a sense of democracy as part of global decision-making.

Corporate executives — not leaders of small- and medium-size enterprises, nor microenterprises — are central to these groups and public-private partnerships. Yet these bodies have their own internal governance and constituencies; as a result, they redraft global principles that were agreed on by governments to meet their own, often business-focused, concerns.

The selected government officials, those considered sympathetic to the goals of multistakeholders, sit on the board as only one of the decision-makers. At the same time, the other players are elevated to a role in global governance without any democratic basis for their participation.

This dynamic is quite different from the one prevalent during the conferences of the 1990s, when civil society organizations, farm and labor organizations, educators, scientists, women and businesses gathered to provide diversified voices to governments, which alone led international decision-making.

UN public-private partnerships tend to worsen changes in the relationship between the intergovernmental process and UN secretariat staff members, who act as the administrative arm of a UN entity.

Where once the secretary-general and the heads of UN specialized agencies and programs saw themselves — and were seen by UN member governments — as governed by a specific intergovernmental body, now the secretariats act more autonomously. They strike up relationships with multiplayer bodies like the World Economic Forum and corporations without intergovernmental oversight.

A result of the increase in institutional ties between the UN and senior corporate executives is that civil society organizations, educators, scientists, women and other social communities have less ability to influence the behavior of the UN bodies and the intergovernmental process.

The weakening tie is driven both by outside factors and internal realities. The pressures on the UN system are significant. There is the cumulative effect, for example, of more than 30 years of flat or negative regular budget growth of the UN.

As an extension of President Trump’s effort to deconstruct the domestic regulatory state in the United States, his administration is also striving to deconstruct the UN system.

Internally, the secretariats perceive that taking relatively autonomous actions is one way to deliver on their generic assignments and to offset the underfunded regular budget by reaching out to potential corporate donors.

This increased autonomy is often reflected in more willingness to accept invitations to join a multistakeholder group to “represent” the UN and governments or to invite major corporations to join a secretariat-led multiparty group. These new links can allow corporations to assert that they are working with the UN — albeit without intergovernmental oversight.

They can also influence a UN secretariat to frame solutions to global problems in ways that are sensitive to their corporate constituency but not necessarily focused on government expectations or the need for leading the world toward systemic reforms.

Of course, the interests of corporations vary. For some consumer-oriented businesses, their increased role in UN operations is a chance to secure a role in creating a global sustainability market for a specific product or service.

For other multinationals, particularly those affiliated with the World Economic Forum, it is an opportunity, after the shocks of the 2008 financial crisis, to re-legitimate the globalized market in the minds of international and national elites.

It does not need to be so. Steps can be taken by governments to reassert leadership in managing globalization and mitigating global environmental crises. These could include a clear definition of conflict of interests to guide secretariats when they partner with a specific enterprise; an intergovernmental review of multistakeholders’ plans to ensure they follow UN goals; and improving intergovernmental oversight of the entire UN system through regular meetings of the heads of all intergovernmental bodies.

With the advent of many players involved in decision-making and international public-private partnerships, the secretariats are increasingly semiautonomous from their intergovernmental body, reaching out to one constituency, the international business community, thus marginalizing their overall roles with other global constituencies.

These developments undermine a public view that democracy — one country-one vote with all of its exceptions — will be the guiding global governance principles today and in the future.

]]>http://www.ipsnews.net/2019/09/call-multistakeholderism-leave-un/feed/0Europeans Mobilising for New IMF Headhttp://www.ipsnews.net/2019/08/europeans-mobilising-new-imf-head/?utm_source=rss&utm_medium=rss&utm_campaign=europeans-mobilising-new-imf-head
http://www.ipsnews.net/2019/08/europeans-mobilising-new-imf-head/#respondThu, 01 Aug 2019 15:04:56 +0000Adam Toozehttp://www.ipsnews.net/?p=162672Adam Tooze is Professor at Columbia University, focusing on the history of economics. In addition, he leads the European Institute at Columbia.

In the grand European political reshuffle of 2019, it turned out that Christine Lagarde was the answer to the conundrum of who should replace Mario Draghi at the European Central Bank. But her move opens another question. Who succeeds Lagarde at the International Monetary Fund?

The question is a European question because, as part of the founding compromise of the Bretton Woods institutions in 1944, the United States nominates the head of the World Bank and the position of managing director at the IMF is taken by a European.

America’s interest at the IMF is secured by its blocking position as the largest individual shareholder and since the 1990s by the nomination of the first deputy managing director. Today that role is occupied by David Lipton, who is currently filling in for Lagarde.

So far, even in an age of growing international tension, that basic distribution of spoils has held up. When Jim Yong Kim abruptly announced his departure from the World Bank in January 2019, the Trump administration nominated David Malpass as his successor. Despite his reputation as a critic of the bank, in April, Malpass was elected unanimously and unopposed. No one wanted to add to the simmering tension with the White House.

Now, having rolled out the red carpet for Lagarde, the Europeans are mobilising to complete the reshuffle by nominating one of their own for the IMF.

Indefensible and anachronistic

Though they have tradition on their side, the fact that the Europeans feel entitled to proceed in this way is indefensible and anachronistic. It is bad for the legitimacy of the IMF and unhealthy for Europe as well.

The eurozone crisis created a toxic codependency between the eurozone and the IMF which needs to be dissolved once and for all. The fact that the Europeans are treating the leadership of a global institution as a bargaining counter in an intra-European political deal — involving the presidency of the European Parliament, the European Council and the European Commission — adds insult to injury.

Faced with the bullying of the likes of Donald Trump and Vladimir Putin, the European Union preens itself as an upholder of multilateral order and co-operation. And such institutions as the World Trade Organization and the IMF do embody general principles of global governance.

But the acceptance of those rules in turn depends on the acceptance by the key players of an underlying distribution of power. Given the huge shift in the balance of the global economy in recent decades, the power-sharing agreement hashed out between the Europeans and the Americans in the final stages of World War II looks increasingly threadbare.

The fact that the emerging-market economies of Asia should have more voice in the Bretton Woods institutions has been acknowledged at least since the Asian financial crises of the late 1990s. In the wake of that crisis, the manner in which the IMF had dealt with countries such as Indonesia and South Korea triggered a major legitimacy crisis. In political terms, borrowing from the IMF became toxic.

Over the protest of several non-EU members of its board, the IMF’s involvement in the eurozone forced the fund to override the basic principles of crisis-fighting it had developed since the 1990s.

By 2007, when the Spaniard Rodrigo Rato casually resigned from the managing directorship and handed the job to the ambitious French socialist Dominique Strauss-Kahn, the fund was in freefall. Its client list had shrunk to Turkey and Afghanistan. Without the fees it earns from lending, the fund’s budget was contracting and ‘DSK’ began his term in office by downsizing its team of economists.

Some would of course wish the IMF good riddance. But the financial crisis of 2008 put paid to that idea. The fund’s client list rapidly expanded, led by desperate eastern-European economies such as Hungary, Latvia and Ukraine. The initiation of the G20 leadership meetings in November 2009 created a new global forum in which the emerging-market economies had more adequate weight.

And it was the London G20 meeting in April 2009 which agreed to adjust the balance of IMF voting rights and to raise its funding to over USD 1 trillion. This restored the IMF as a 21st-century crisis-fighting organisation.

Confidence shaken

But where and how should that firepower be directed? In 2010 global financial confidence was shaken by the outbreak of the eurozone crisis. The thought of involving the IMF in the affairs of the eurozone horrified both the Sarkozy government in France and the ECB.

But Europe’s own crisis-fighting apparatus worked painfully slowly. To stabilise the situation, a bargain was struck between the German chancellor, Angela Merkel, and the US president, Barack Obama, supported by the ambition of DSK.

The IMF became deeply embroiled in both the national crisis programmes for Greece, Ireland and Portugal and the overall backstop to the eurozone. In May 2010 no less than €250bn of the fund’s resource were earmarked to complement the European Financial Stability Facility, the hastily improvised predecessor of the European Stability Mechanism.

Over the protest of several non-EU members of its board, the IMF’s involvement in the eurozone forced the fund to override the basic principles of crisis-fighting it had developed since the 1990s. From 2010 to 2015 it found itself underwriting debt-restructuring programmes, which the fund’s own economists knew were inequitable and unsustainable.

When DSK’s career began to unravel in 2011, via a series of accusations of alleged sexual offences (charges were eventually dropped or he was acquitted), the Europeans even had the effrontery to argue that his successor must be European because the IMF was now existentially entangled with the eurozone.

And the Obama administration insisted the IMF had to remained involved, for fear that Europe might trigger another ‘Lehman moment’.

To be instrumentalised in this way by its two largest shareholders was bad for the legitimacy of the IMF as a global institution and it was bad for Europe. Not only did the fund, as part of the ‘troika’ with the commission and the ECB, underwrite Europe’s disastrous management of the eurozone debt crisis. The ability to call on the fund meant also that Europe could drag its feet over building its own safety net.

It is to Lagarde’s credit that she has gone a long way towards extricating the IMF from the eurozone, refusing to sign up to its third bailout for Greece in 2015. But the experience only confirms that the fund is not safe in Europe’s hands.

Matter of contention

Meanwhile, the argument for an increase in emerging-market-economy influence over the IMF is stronger than ever. Today the EU27, excluding the UK, has a voting share of 25.6 per cent, compared with 16.5 per cent for the US, China’s 6 per cent, 5.3 per cent for Germany, 4 per cent for France and India’s 2.6 per cent. How exactly quotas should be revised is a matter of contention.

Is the relevant criterion the size of foreign exchange reserves or of gross domestic product? If GDP, then is to be measured at purchasing-power parities or current exchange rates?

In PPP terms China is the largest economy in the world; at current exchange rates it still a long way behind the US. And how should the closed nature of much of the Chinese economy weigh in the balance?

Picking the formula is itself a highly political exercise. But even if one takes the formula for IMF quotas agreed by the existing dispensation, the implications are stark. China’s voting share should double to 12.9 per cent.

The voting share of the EU should fall to 23.3 per cent and that of the US should be adjusted down to 14.7 per cent. The latter change is critical because it would push the US below the 15 per cent of the vote it needs to exercise a veto over the decisions of the board, which require an 85 per cent majority.

We are in a fragile moment in global politics. America is erratic. Tensions with China are mounting. The EU has decisions to make about where it stands.

There is no chance of America accepting such a change. Indeed, there is no realistic prospect of Washington signing off on any quota adjustment. Under Obama, the Republicans in Congress took until January 2016 to approve the modest shift in the balance of voting rights accepted by the US administration in London in the spring of 2009.

For the Europeans to take advantage of this deadlock to once again appoint one of their own to the managing directorship would be a blatant demonstration of bad faith. If Europe is serious about securing the international order by means of progressive accommodation of the legitimate demands of rising powers, it could send an important signal by opening Lagarde’s replacement to well-qualified candidates from emerging markets. There are several obvious possibilities.

Front runners

The three most commonly mentioned front runners would be: Augustin Carstens, formerly of the Mexican central bank and currently running the Bank for International Settlements in Basle; Raghuram Rajan, formerly chief economist at the IMF, head of the central bank of India and now kicking his heels at the Booth School of business at the University of Chicago; and Singapore’s former finance minister Tharman Shanmugaratnam, who was the first Asian to chair the IMF’s key policy steering group, the International Monetary and Financial Committee.

The fact that these men come from emerging-market economies does not make them advocates of heterodox views — all are habitués of the Davos circuit. Rajan is the highest profile in intellectual terms. But his preferences run in the redirection of ordoliberalism. Rajan was one of the fiercest critics of the unconventional monetary-policy measures pursued by Ben Bernanke’s Federal Reserve.

Nevertheless, for any of them to head the IMF would be an acknowledgement of the fundamental shift in the balance of the world economy. And any of them would be a stronger candidate than the short list that the Europeans have so far come up with.

Mark Carney, the (Canadian-born) head of the Bank of England, is the only ‘European’ who could match up to these three in terms of standing in the world of global finance. But, despite his Irish passport, he has been ruled out as insufficiently European. And given its need for support over Brexit, Dublin is not going to force the issue.

Regrettably, the decisive voices in Europe are determined that a representative of the eurozone should have the job. And at this point the familiar European squabbling begins. The southern Europeans have two candidates in the ring: Mário Centeno of Portugal, the current head of the Eurogroup, and Nadia Calviño, the Spanish economy minister and a former senior EU official. Both lack profile and would struggle to find the support of northern Europe.

Deeply implicated

The two candidates who would attract the support of northern Europe are deeply implicated in the disaster of the eurozone. Olli Rehn, the governor of the Finnish central bank, was widely thought of as an alternate for Jens Weidmann in the ECB stakes.

He would no doubt attract support from the new ‘Hanseatic League’, with all that implies: between 2010 and 2014, as commissioner for economic and monetary affairs and the euro in the Barroso commission, Rehn vocally advocated the austerity line.

But even worse would the man who is apparently the front runner, Jeroen Dijsselbloem, the former finance minister of the Netherlands. As president of the Eurogroup from 2013 to 2018, he personified the combination of populist northern resentment and fiscal narrow-mindedness that dictated eurozone policy towards Cyprus and Greece. If he were to emerge as the IMF’s managing director, it would be a truly horrible twist in the saga of the fund’s entanglement with the eurozone.

We are in a fragile moment in global politics. America is erratic. Tensions with China are mounting. The EU has decisions to make about where it stands. In the UN and Bretton Woods institutions, created in the final stages of World War II, it has an anachronistic over-representation. There is a risk that Europe’s preoccupation with its own problems will undercut the legitimacy of those institutions.

Instead Europe should put what leverage it retains to good use. It should start by inaugurating a new era at the IMF.

SUVA, Fiji, 27 June 2019 (IPS) — Are the most climate-vulnerable nations of the world right to demand that developed and major economies commit to carbon neutrality by 2050?

Should the poorest nations of the world insist that the “haves” put their significant economic and political resources behind aggressive efforts to combat climate change?

Frank Bainimarama

Do we have the right to expect political leaders to show the courage, vision and will to lead their citizens to responsible action to stem the growth of global warming?

The answer is yes, of course, and the reason is simple: We cannot save the world from climate catastrophe if the largest emitters of CO2 don’t step up now.

And the most vulnerable countries of the world cannot adequately reduce our emissions and adapt to the effects of climate change without economic support from the developed world that is flexible and accessible. Governments, private financial institutions, international financial institutions and foundations must be a part of the solution.

Last week, European Union leaders missed a critical opportunity to develop a more aggressive collective mitigation target by 2020 and achieve carbon neutrality by 2050. Perhaps more importantly, they had a chance to lead the world to carbon neutrality, but they failed to step up at the critical moment.

Their failure was a bitter disappointment to countries, like Fiji, that are doing everything within our means to achieve those same results. Island nations are determined to lead by example.

We have laid the ground work, but unfortunately, our efforts, strenuous though they may be, will not be enough alone. We need developed economies—and advanced developing economies—to make the same strenuous effort.

We are at a critical juncture in this fight, at a point where we know we can still act globally to change the course of human-made climate change or fail to act and face the reverberations of climate, environmental and biodiversity crises for generations to come.

The political and scientific ground has shifted under our feet since we signed the Paris Agreement in 2015. Governments have changed, and populists and climate sceptics have gained ascendancy in some countries.

Then, last October, the IPCC released its Special Report on 1.5 Degrees, which made it clear that time is closing in on us; we simply don’t have the time to turn the tide that we thought we had in Paris.

It was a struggle then for small island states and members of the High Ambition Coalition to win the inclusion in the Paris Agreement of an aspiration to limit global warming to of 1.5 degrees, when the official goal of the agreement was 2 degrees.

Now we find that we are less than 12 years away from dramatic, far-reaching, and possibly irreversible consequences of surpassing 1.5 degrees of warming if we keep going the way we’re going. We simply cannot miss opportunities like the one the EU missed last week, and we must embrace all possible solutions.

There are three things we need to focus on now. First, we need to reduce the amount of carbon we are releasing into the atmosphere. This means that countries need to set much more ambitious targets in their national climate commitments under the Paris Agreement that lead to rapid decarbonisation of high-emitting industries and sectors.

I am encouraged to see that the number of countries that are stepping up to the 2020 deadline is growing, but I’m both proud and concerned that most of these are from the developing world. The names of many developed and major economies are still notably absent from this list.

Second, we need to remove more of the carbon that has already been emitted into the atmosphere and this means massively increasing our investment in nature — developing and implementing natural climate solutions that can be implemented worldwide.

Nature has the incredible power to remove carbon dioxide from the earth’s atmosphere, but we are currently failing to protect this vital resource. We will not be able to achieve 1.5 degrees without dramatically recalibrating how we look after and restore our natural landscapes. Under the leadership of China and New Zealand, we are expecting a big step forward on this front at the upcoming UN Secretary-General’s Climate Summit (in New York on September 23 this year).

And, third, developed and major economies should increase the amount — and rapidly deploy — climate finance for developing countries to allow us to achieve and increase our mitigation targets, as well as urgently build our resilience to the impacts of climate change. This means at least $100 billion a year by 2020.

The irony of the EU’s failure of will is that so many European leaders understand fully what is at stake, and many individual European countries—and non-European countries—are beginning to take responsible action.

Still, it is a sad fact that the Marshall Islands and Fiji—two of the most marginal carbon emitters in the world—are the only two countries to have officially submitted long-term plans to the UN for achieving net-zero emissions by 2050.

The Paris Agreement committed signatories to achieving net carbon neutrality by the second half of the 21st century, but it was unclear what was intended by the term “second half.”

We know now that the deadline must be the beginning of the second half, not the end. Fifty years of ambiguous wiggle room, 50 years of hesitancy, and 50 years of procrastination will lead us to the catastrophe we fear.

Setting a date for achieving net-zero, matched with boosting short-term action, is critical and that’s where national leadership comes in. It gives all the relevant stakeholders, government departments, businesses and citizens the signal they need to start making concerted changes.

If developing countries can develop robust emissions-reduction targets that truly drive us toward the goals we agreed to in Paris, then other nations can, too.

The EU, and the rest of the developed world, can still change course. The UN Secretary General’s Climate Summit in September will provide a forum for every country to lay out their climate ambitions before the world and be judged.

I urge developed countries to come to New York with the most aggressive and most ambitious plans they can devise. In Paris, the small island states used our moral weight to push the world to accept the aspiration of limiting global warming to 1.5 degrees. In New York, vulnerable developing countries must do the same.

We cannot accept that countries with the means to do more will sit on the sidelines and do less.

]]>http://www.ipsnews.net/2019/06/cannot-save-world-climate-catastrophe-largest-emitters-co2-dont-step-now/feed/1Mauritius Scores Win over Britain in Diego Garcia Decolonisationhttp://www.ipsnews.net/2019/02/mauritius-scores-win-britain-diego-garcia-decolonisation/?utm_source=rss&utm_medium=rss&utm_campaign=mauritius-scores-win-britain-diego-garcia-decolonisation
http://www.ipsnews.net/2019/02/mauritius-scores-win-britain-diego-garcia-decolonisation/#respondThu, 28 Feb 2019 10:44:54 +0000Arul Louishttp://www.ipsnews.net/?p=160329Mauritius has scored a victory over Britain at the International Court of Justice (ICJ) in a case involving the decolonisation of the strategically important island of Diego Garcia that is home to a United States military base. The ICJ said on Monday that Britain must give up to Mauritius control of the Chagos Archipelago where […]

Diego Garcia island, which hosts a United States military base in the Indian Ocean. (Photo: NASA)

By Arul LouisUNITED NATIONS, Feb 28 2019 (IPS)

Mauritius has scored a victory over Britain at the International Court of Justice (ICJ) in a case involving the decolonisation of the strategically important island of Diego Garcia that is home to a United States military base.

The ICJ said on Monday that Britain must give up to Mauritius control of the Chagos Archipelago where the Indian Ocean military base is located on the Diego Garcia island.

The opinion issued in The Hague by the court’s majority that included Judge Dalveer Bhandari of India said that the decolonisation of Mauritius “was not lawfully completed” when it attained independence because Britain carved away the Chagos Archipelago from Mauritius and retained control of it.

The opinion handed down by the majority of 13 judges said Britain “is under an obligation to bring to an end its administration of the Chagos Archipelago as rapidly as possible.”

The sole dissenter was American Judge Joan E. Donoghue. Britain is not represented on the bench after it withdrew the nomination of Judge Christopher Greenwood for re-election in 2017 when he could not get a majority of the votes in the General Assembly against Bhandari.

The court gave the opinion, which is non-binding, at the request the United Nations General Assembly made in a 2017 resolution.

Vehemently opposed by the US and Britain, the resolution received the vote of 94 countries while 15 voted against it and 65 abstained.

Britain has opposed the referral to the court saying it was a bilateral matter with Mauritius and indicated it would reject it.

There is unlikely to be any challenges to the US Diego Garcia base from Mauritius, either.

“We are not asking for the dismantling of the base”, Prime Minister Pravind Jugnauth Mauritian said after the ICJ opinion, according the Mauritian newspaper L’Express.

It reported that he did not want to reveal the next step that his country was going to take but said he wanted Britain “to recognise the unity of Mauritius”.

Britain cut off the Chagos Archipelago from Mauritius in 1965 before granting it independence in 1968.

The people living on Diego Garcia were forcibly removed from there by the colonial administration and it was leased to the US, which set up its strategic Indian Ocean military base on the island.

About 50 countries gave the court written statements, some against Britain and other in support of it.

Vishnu Dutt Sharma, the Legal Adviser of the External Affairs Ministry submitted India’s statement that said that the process of decolonisation was not completed because Britain had not complied with UN resolutions for it.

In the 1970s and 1980s India had vehemently opposed the US base in Diego Garcia.

Then-Prime Minister Indira Gandhi called the base 2,000 kilometres from India as a threat to India.

Since then the strategic environment and India’s interests have changed due the rise of China and the threats to navigation from piracy. India is now developing close defence ties with the US and toned down its rhetoric.

When the resolution to refer matter to the court was taken up at the UN in 2017, India’s Permanent Representative Syed Akbaruddin said that while supporting the position of Mauritius as “a matter of principle” to uphold the process of decolonisation and the respect for sovereignty of nations, “India shares with the international community, security concerns relating to the Indian Ocean”.

]]>http://www.ipsnews.net/2019/02/mauritius-scores-win-britain-diego-garcia-decolonisation/feed/0Veterans of the Global Financial Crisis Pass their Wisdom on to the Next Generationhttp://www.ipsnews.net/2019/01/veterans-global-financial-crisis-pass-wisdom-next-generation/?utm_source=rss&utm_medium=rss&utm_campaign=veterans-global-financial-crisis-pass-wisdom-next-generation
http://www.ipsnews.net/2019/01/veterans-global-financial-crisis-pass-wisdom-next-generation/#respondWed, 02 Jan 2019 14:08:56 +0000Chris Welliszhttp://www.ipsnews.net/?p=159458Chris Wellisz is on the staff of Finance & Development at the International Monetary Fund (IMF)

It happened again and again in a career punctuated by upheavals: the peso crisis of 1994, the Asian crisis of 1997, and finally, the big one—the global financial crisis of 2008.

Each time he started a new government job, Timothy Geithner hoped to find a letter from his predecessor, explaining what to do and whom to call if things fell apart. The desk drawer was always empty.

“Financial crises are probably the most devastating economic events that can happen to a country,” says Geithner, who fought the last conflagration as president of the Federal Reserve Bank of New York and later US Treasury secretary. “I’d like our successors to have a better base of knowledge.”

So every summer, Geithner takes time off from his job as president of Warburg Pincus, a private equity firm, to help teach a two-week crisis management workshop for regulators from around the world.

It’s one part of the Yale Program on Financial Stability, which also offers a master’s degree and is undertaking an ambitious project to create, on a very large scale, what Geithner never found in that desk drawer—a manual for crisis managers.

“A lot of times we’ve made the same mistakes in fighting financial crises over time simply because there was no body of knowledge that people had jointly studied and debated,” says Andrew Metrick, a professor of finance at Yale who founded and runs the program. “It’s almost like you show up at the emergency room and the doctor says, ‘It looks like a broken arm. I think I’ve seen someone once do something for a broken arm.’”

Metrick was one of those emergency room financial doctors. Six months after the collapse of Lehman Brothers in September 2008, he got a call from the Obama administration.

They desperately needed a financial economist. So Metrick moved to Washington to work for the Council of Economic Advisers. There, as chief staff economist, he helped develop programs to revive housing and financial markets.

When it came time to propose legislation, he discovered that academic research wasn’t very useful.

“There was no real great connection between academic knowledge, economic intuition, and what we actually could put in the law because there just wasn’t a good body of research there,” Metrick says. “I was determined that when I came back to the academy I would try to be part of something that would help to fill that gap.”

That was the genesis of the Yale Program on Financial Stability, which got off the ground in 2014 with donations from organizations including the Alfred P. Sloan Foundation.

Geithner joined soon after, teaching, raising money, and chairing the advisory board, which includes former central bankers such as the Federal Reserve’s Ben Bernanke, Mexico’s Agustín Carstens, and Malaysia’s Zeti Akhtar Aziz.

Geithner brought a practical focus to what became known as the New Bagehot Crisis-Response Project, named for Walter Bagehot, a 19th century British economist and author of Lombard Street: A Description of the Money Market, a bible of sorts for the guardians of financial stability.

The project’s 14 researchers compile case studies of responses to the global financial crisis and the euro crisis that followed it. Eventually, they plan to study manias and panics going back to the South Sea Bubble in the 18th century.

While the global crisis spawned countless books, articles, and memoirs, the Bagehot project seeks to analyze it in a systematic way—and determine what kinds of government actions worked, what kinds didn’t, and why. The architects of crisis-fighting programs in various countries are consultants on the project.

“Our focus is really on the technical details of the interventions,” Metrick says.

Their plan is to create an online tool that crisis managers can turn to in real time, in case they need to recapitalize a bank, say, or set up an emergency liquidity facility. They will also learn what to avoid, like Ireland’s decision to guarantee the liabilities of its banks, which transformed a bank run into a far more serious sovereign debt crisis.

“Because the classic panic happens pretty rarely in the same country, even though it happens around the world with pretty appalling frequency, there’s not actually that much institutional memory, and there certainly wasn’t at the Treasury or the Fed, about how you deal with a systemic financial crisis,” Geithner says in an interview.

The summer symposium—Geithner called it a “war college”—was a two-week workshop for central bankers and regulators. The central banks of China, Europe, Japan, and the United States all sent participants, along with agencies like the Bank for International Settlements and the European Stability Mechanism.

Another piece of the Yale program is the two-day Financial Crisis Forum, where veterans including former Treasury Secretary Henry Paulson offer their insights on subjects from capital injections to frozen money markets.

“For the current generation of officials, especially the younger ones who attend the conference, learning from history is vital,” says Paul Tucker, deputy governor of the Bank of England from 2009 to 2013. “Going forward, current officials also need to learn from the crises that, believe it or not, were averted or successfully contained.”

Finally, there is Yale’s one-year master’s degree in systemic risk, which offers early career professionals a chance to hone their skills and develop new ones. A recent graduate is Özgü Özen Çavuşoğlu, who returned to her job in the financial stability division of Turkey’s central bank and is now researching an early-warning system for the country’s economy.

Just as important, she says, was the opportunity to forge bonds with colleagues from across the globe.

“We are living in an interconnected world,” Özen Çavuşoğlu says. “That’s why the network of people with the same understanding will play an important role in having a stable global economy.”

]]>http://www.ipsnews.net/2019/01/veterans-global-financial-crisis-pass-wisdom-next-generation/feed/0Palestine to Lead UN’s Largest Group of Developing Nationshttp://www.ipsnews.net/2018/07/palestine-lead-uns-largest-group-developing-nations/?utm_source=rss&utm_medium=rss&utm_campaign=palestine-lead-uns-largest-group-developing-nations
http://www.ipsnews.net/2018/07/palestine-lead-uns-largest-group-developing-nations/#commentsTue, 24 Jul 2018 07:30:51 +0000Thalif Deenhttp://www.ipsnews.net/?p=156836The Group of 77 (G77) — the largest single coalition of developing countries at the United Nations– is to be chaired by Palestine, come January. “It’s a historical first, both for Palestine and the G77,” an Asian diplomat told IPS, pointing out that Palestine will be politically empowered to collectively represent 134 UN member states, […]

The Group of 77 (G77) — the largest single coalition of developing countries at the United Nations– is to be chaired by Palestine, come January.

“It’s a historical first, both for Palestine and the G77,” an Asian diplomat told IPS, pointing out that Palestine will be politically empowered to collectively represent 134 UN member states, including China.

Created in June 1964, the 54-year-old Group comprises over 80 per cent of the world’s population and approximately two-thirds of the United Nations membership

Traditionally, the G77 speaks with a single voice before the 193-member General Assembly, the highest policy making body at the UN, and also at all UN committee meetings and at international conferences.

Under a system of geographical rotation, it was Asia’s turn to name a chairman for 2019. The Asian Group has unanimously endorsed Palestine, which will be formally elected chair at the annual G77 ministerial meeting, scheduled to take place in mid-September.

Palestine will take over from the current chair, Egypt, which is representing the African Group of countries.

The chairmanship is a tremendous political boost for Palestine at a time when it is being increasingly blacklisted by the Trump administration which is kowtowing to the Israelis.

Nadia Hijab, President, Al-Shabaka Board of Directors, told IPS: “At a time when Israel is moving on all fronts to wipe Palestine definitively off the map through relentless colonization – and to muscle in on UN committees despite its flagrant violations of international law — it is a source of solace to see Palestine slated for a very visible role at the UN.”

However, comforting as this may be, she pointed out, it will take a lot more than this to make “Palestine” a reality on the ground.

Sadly, the Ramallah-based Palestinian leadership has been unwilling or unable to end security coordination with Israel and to heal internal divisions. Instead, she said, it is cracking down on peaceful Palestinian protests.

”It is also reshaping the Palestine Liberation Organization, which has always been recognized as the sole legitimate representative of the Palestinian people, in a way that excludes alternative and opposing views,” Hijab declared.

Martin Khor, Advisor to the Malaysia-based Third World Network, told IPS: “I think it will be a historic and a significant development-first for the G77 countries to elect Palestine as its chair, and thereby affirm their confidence in its leadership.”

The election will also prove that the State of Palestine itself has decided it can mobilise its human and material resources to take on the complex task of coordinating the largest grouping in the UN system– even though it has to fight its own very challenging battles of survival and independence, said Khor, the former executive director of the Geneva-based South Centre.

“Both Palestine and the G77 deserve the support of people around the world to wish them success in voicing and defending the interests of developing countries in these very difficult times when international cooperation and multilateralism are coming under attack,” he said.

Last week, the Trump administration refused to grant visas to a six-member Palestinian delegation that was expected to participate at the UN’s High-Level Political Forum (HLPF) on Sustainable Development which took place July 16-18.

This was clearly in violation of the 1947 US-UN Headquarters Agreement which calls on the US, among other obligations, to facilitate delegates participating at UN meetings.

Asked about the visa refusal, UN deputy spokesperson Farhan Haq told reporters last week: “Well, certainly, we’re aware of this latest incident, but as far as I’m aware, there is a Host Country Committee that deals with disputes involving access to the United Nations and any problems dealing with the host country on that.”

”As of now, the Host Country Committee has not been approached or formally informed of this, so they haven’t acted on this. But it’s normally their role to deal with this situation. Of course, we would hope that all of those who are here to attend UN meetings would have the ability to do so,” he added.

Samir Sanbar, a former UN Assistant Secretary-General who headed the Department of Public Information (DPI), told IPS chairing the G-77 will be an unprecedented role for Palestine. He said leading that large, varied yet collaborative group will require tactful handling by all sides at a time when the rightful Palestinian cause needs every support as the region—and a fragmented conflicted, almost leaderless world— is facing serious challenges.

“It is hoped that Ambassador Riyad Mansour, Permanent Observer of the State of Palestine and an experienced diplomat with proven U.N. record, will be given the opportunity and required leeway to operate in an inclusive, patient and fruitful manner to enhance the role of the G 77 while advancing the status of the Palestine, said Sanbar, who served under five different UN secretaries-general.

At the UN, the Trump administration has been increasingly undermining the Palestinian cause – a cause long supported by an overwhelming majority of member states in the world body.

In May, the US relocated its embassy from Tel Aviv to Jerusalem even though the UN has deemed it “occupied” declaring that the status of East Jerusalem should be subject to negotiations and that East Jerusalem will be the future capital of the State of Palestine.

Last month, the Trump administration also reduced its funding—from an estimated $360 million in 2017 to $60 million this year — to the UN Relief and Works Agency (UNRWA), created in 1949 to provide assistance to over 5.5 million refugees resulting from the creation of Israel in 1948.

Last year when Secretary-General Antonio Guterres proposed the appointment of former Palestinian Authority Prime Minister Salam Fayyad as UN’s Special Representative in Libya, the proposal was shot down by US Ambassador Nikki Haley, purely because he was a Palestinian.

And speaking before the US House Appropriations State and Foreign Operations Subcommittee, Haley went even further down the road when she indicated she would block any appointment of a Palestinian official to a senior role at the UN because Washington “does not recognize Palestine” as an independent state.

Suddenly, the Palestinians, for the first time, seem blacklisted– and declared political outcasts– in a world body where some of them held key posts in a bygone era.

Guterres, who apparently relented to US pressure by stepping back on Fayyad’s appointment plucked up courage to tell reporters: “I think it was a serious mistake. I think that Mr. Fayyad was the right person in the right place at the right time, and I think that those who will lose will be the Libyan people and the Libyan peace process.”

And, he rightly added: “”I believe that it is essential for everybody to understand that people serving the UN are serving in their personal capacities. They don’t represent a country or a government – they are citizens of the world representing the UN Charter and abiding by the UN Charter,” he said, pointedly directing his answer at Haley

A former chair of the G77 chapter in Vienna told IPS although the Palestinian issue is fundamentally a political one, centred as well on the legitimacy and legality of Israeli occupation, it no longer remains in the political-legal realms exclusively.

He said there are a large number of issues of economic, social and cultural and environmental nature, including health, education, food, water, etc, which arises both directly from conditions of occupation, as well as laterally from other conditions such as denial of humanitarian access, and, very recently, the declaration of “Israel as a Jewish state”.

It is logical that advancing a struggle on these issues call for a broad forum of solidarity, and the G 77 fits the bill, he noted.

In an oped piece marking the 50th anniversary of the G77, Mourad Ahmia, the G77 Executive Secretary said: “When it was established on Jun. 15, 1964, the signing nations of the well-known “Joint Declaration of Seventy-Seven Countries” formed the largest intergovernmental organisation of developing countries in the United Nations to articulate and promote their collective interests and common development agenda.

Since the First Ministerial meeting of the G-77 held in Algeria in October 1967, and the adoption of the “Charter of Algiers”, the Group of 77 laid down the institutional mechanisms and structures that have contributed to shaping the international development agenda and changing the landscape of the global South for the past five decades, he pointed out.

“Over the years, the Group has gained an increasing role in the determination and conduct of international relations through global negotiations on major North-South and development issues.”

The Group has a presence worldwide at U.N. centres in New York, Geneva, Nairobi, Paris, Rome, Vienna, and Washington D.C., and is actively involved in ongoing negotiations on a wide range of global issues including climate change, poverty eradication, migration, trade, and the law of the sea.

“Today, the G-77 remains the only viable and operational mechanism in multilateral economic diplomacy within the U.N system. The growing membership is proof of its enduring strength,” he declared.

]]>http://www.ipsnews.net/2018/07/palestine-lead-uns-largest-group-developing-nations/feed/2Renewed Crises in Emerging Economies and the IMF ‒ Muddling Through Again?http://www.ipsnews.net/2018/06/renewed-crises-emerging-economies-imf-%e2%80%92-muddling/?utm_source=rss&utm_medium=rss&utm_campaign=renewed-crises-emerging-economies-imf-%25e2%2580%2592-muddling
http://www.ipsnews.net/2018/06/renewed-crises-emerging-economies-imf-%e2%80%92-muddling/#respondTue, 05 Jun 2018 14:02:06 +0000Yilmaz Akyuzhttp://www.ipsnews.net/?p=156062Yilmaz Akyüz is chief economist, South Centre, Geneva and former Director of the Division on Globalization and Development Strategies, UNCTAD, Geneva

A group of demonstrators protest in the Argentine city of Rosario against the wave of lay-offs of public employees since President Mauricio Macri took office. Credit: Courtesy of Indymedia.org

By Yilmaz AkyüzGENEVA, Jun 5 2018 (IPS)

It is now more than a decade and a half since the last severe currency crisis in a major emerging economy ‒ that was in Argentina in 2001-2002 following a series of crises in Russia, Turkey and Brazil. It is now common knowledge that such crises generally occur when countries fail to manage surges in capital inflows so as to prevent build-up of fragility including currency appreciations, large and persistent current account deficits, increased leverage and currency and maturity mismatches in balance sheets.

The absence of a major crisis in the Global South since the early years of the new millennium owes not so much to judicious management of the surge in capital inflows that had begun in the early 2000s and continued with full force after the global financial crisis, as to persistently benign global financial conditions resulting from exceptional monetary policies in the US, Europe and elsewhere in advanced economies and favourable global risk appetite.

Even though there has been no fundamental reversal of these policies, the arrival of Minsky moment appears to be imminent with markets, in expectations of normalization of monetary policy in the US, getting nervous about the risks they have taken by investing heavily in emerging economies with poor economic fundamentals in search for yield in conditions of low global interest rates and ample supply of liquidity.

Yilmaz Akyüz, chief economist of the South Centre, Geneva.

The first serious signs have appeared in Argentina with the recently elected government of Macri knocking on the doors of the IMF. But Argentina is perhaps only the tip of an iceberg. Several other emerging economies are equally and even more susceptible to sudden stops and reversals of capital flows and currency and balance of payments crises.

In typical IMF interventions in previous crises, liquidity support was provided mainly to keep debtor countries current on their payments to international creditors and to maintain the capital account open. As a result, obligations to private creditors were translated into debt to the IMF. Simultaneously, austerity was imposed on debtors by means of hikes in domestic interest rates, fiscal retrenchment, cuts in employment, wages and pensions in order to achieve a sharp turnaround in the current account, primarily through import compression, and to restore confidence among international creditors and investors.

This approach to crisis management was widely criticised on several grounds. A strong case was made that the combination of debtor austerity and creditor bailout would lead to inequality between debtors and creditors in the incidence of the burden of the crisis, create moral hazard by allowing creditors to avoid the full consequences of the risks they have taken and are paid for, and endanger the financial integrity of the Fund.

Inequalities could also be created among creditors; in the event of a default and restructuring, those who exit first could escape without haircut, leaving the others to take the full brunt of debt write-offs. Profit opportunities are also created for vulture funds, at the expense of genuine creditors as well as the debtor, as seen in the case of Argentina.

Considerable scepticism was also expressed within the Fund about the wisdom of using public money to bail out private creditors and investors. During the earlier episodes of crises, the IMF Board recognized the need for involving the private sector in forestalling and resolving financial crises, but insisted on voluntary mechanisms, notably collective action clauses (CACs) and automatic rollover clauses in debt contracts and informal negotiations between debtors and creditors.

However, as these proved ineffective and some advanced economies started to oppose bailouts, the IMF Board agreed that in extreme circumstances, if it is not possible to reach agreement on a voluntary standstill, members may find it necessary, as a last resort, to impose one unilaterally, and that since there could be a risk that this action would trigger capital outflows, a member would need to consider whether it might be necessary to resort to the introduction of more comprehensive exchange or capital controls.

No protection against litigation was offered, but it was suggested that the Fund could signal its acceptance of a standstill imposed by a member by lending into arrears to private creditors. The Fund staff went further and proposed a formal Sovereign Debt Restructuring Mechanism (SDRM) to facilitate sovereign bond workouts. However, this did not elicit adequate support and had to be abandoned. The issue was soon forgotten with a rapid recovery of capital inflows to emerging economies and bounce back of economic activity in crisis-hit countries.

However, private sector involvement in crisis resolution was back on the agenda again with the onset of the Eurozone crisis. The Fund turned its attention to sovereign debt restructuring after misjudging the sustainability of the Greek debt, very much in the same way as it had done with Argentina about a decade earlier, pouring in money to bail out private creditors.

It restarted searching ways and means for involving the private sector in crisis resolution so as to “limit the risk that Fund resources will simply be used to bail out private creditors” and to ensure that private creditors made some concessions and took some losses on their holdings as a condition for Fund lending.

Subsequently it was suggested that the sovereign approaching the Fund for assistance were to be asked to find ways of rolling over all bonds and commercial loans falling due within the life of the Fund programme. This would be necessary whether external payments difficulties are perceived to be as one of liquidity or solvency which is often difficult to identify with a reasonable degree of precision ex ante.

This so-called “reprofiling” was again to be market-based and voluntary. However, no statutory mechanism was proposed for bailing in the private creditors in the event of failure of a voluntary agreement. In such an event, as long as the IMF stood firm in refusing lending without private sector involvement, the debtor would have had no option but to impose unilateral standstills on its obligations to private creditors, but without any statutory protection against litigation. Although various proposals were made outside the Fund to address the holdout problem and protect debtors against litigation, the matter was once again put aside without being resolved.

The stakes are now getting higher because of massive amounts of external liabilities that emerging economies built up in the past ten years. These are not only in debt contracted in reserve currencies, notably by private corporations, but also unprecedented amounts of foreign holdings in local deposit, bond and equity markets.

Furthermore, most emerging economies have eliminated or significantly reduced restrictions over capital outflows by residents. Consequently, exit of nonresidents from local markets and capital flights by residents now constitute bigger sources of potential drain on reserves of emerging economies than external debt contracted in reserve currencies.

Emerging economies are widely commended for large amounts of international reserves they have accumulated in the new millennium. However, in the large majority of cases these came from capital inflows rather than current account surpluses. Cumulatively, all G20 emerging economies except China and Russia have registered current account deficits since the beginning of the millennium, at a total amount of some $2 trillion while their external labilities have increased by over $4 trillion.

Reserves accumulated is less than a quarter of the increase in total liabilities while the rest of capital inflows (new liabilities) has been used for financing current account deficits or private acquisition of assets abroad – assets that would not necessarily return at times of interruption and reversal of non-resident capital inflows.

As of end 2016, on average, the reserves of deficit G20 emerging economies were less than one-third of their total non-FDI external liabilities including debt issued internationally and non-resident holdings in local deposits, bonds and equities. In many cases these holdings plus short-term forex debt reach or exceed international reserves. In most cases reserves would be totally inadequate to provide a reliable buffer against a generalized exit of non-residents and a widespread capital flight by residents.

Given the dismal record of the IMF in crisis intervention and management, many emerging economies are loath to go back to the IMF in the event of a severe currency and liquidity crisis, except those such as Argentina whose neo-liberal policies are strongly supported by the IMF. In any case at some $800 billion, the lending capacity of the IMF would be too small to take on the task. The level of liquidity that may be needed by many emerging economies in the event of capital reversals exceed by a large margin what the IMF could provide under exceptional financing.

Most emerging economies would also be highly reluctant to resort to unilateral debt standstills and exchange controls in view of their exposure to creditor litigation and chronic dependence on international lenders and investors. On the other hand, not much relief could be expected from South–South multilateral arrangements for liquidity provision, notably the Chiang-Mai Initiative Multilateralization (CMIM) of East Asian countries and the Contingent Reserve Arrangement (CRA) of BRICS.

These are not only small in size but also have design problems. The CMIM has never been called upon, even during the global crisis. It does not include a common fund but a series of promises to provide liquidity, with each country reserving the right not to contribute to the specific request by a member. Its size is $240 billion and access beyond 30 per cent of quotas is tied to an IMF program.

The CRA is also designed to complement rather than substitute the existing IMF facilities. Its size is even smaller, $100 billion, and access beyond 30 per cent is also tied to the conclusion of an IMF programme. Thus, these regional arrangements do not provide escape from IMF conditionality and surveillance.

That leaves bilateral swaps among central banks and bilateral lending by governments of reserve-currency countries, notably the US, and surplus emerging economies with ample international reserves such as China. A very large part of bilateral swaps established by the US Federal Reserve is with other advanced economies.

Those with emerging economies (Brazil and Mexico) are too small to provide much relief. In the words of the former chair of the US Federal Reserve, Janet Yellen, expanding the swap lines to serve as a safety net for countries encountering balance of payments pressures is not within the Fed’s mandate and therefore is a complete non-starter. China has swaps with over 30 countries. But these are mostly with advanced economies and designed to support trade and investment and to promote the international use of renminbi rather than boost reserves.

To sum, as recognised by the IMF, the global financial safety net including international reserves, Fund resources, bilateral swap arrangements, regional financing arrangements is “fragmented with uneven coverage” and “too costly, unreliable and conducive to moral hazard”.

Given the aversion of emerging economies to the IMF and unilateral debt standstills and exchange controls, the next crisis is likely to be even messier than the previous ones. Some countries may seek and succeed in getting bilateral support from China or some reserve-currency countries according to their political stance and affiliation.

For instance, one of the most vulnerable emerging economies, Turkey, is likely to approach China, Russia or some Gulf states with strong reserve positions rather than the IMF if its currency goes into a free fall. In such cases, crisis intervention would become even more politicised than in the past and a lot less reliant on multilateral arrangements.

By failing to establish an orderly and equitable system of crisis resolution, the IMF may very well find its role significantly diminished in the management of the next bout of crises in emerging economies. In other words, multilateralism, however imperfect, could face another blow in the sphere of finance after trade.

]]>http://www.ipsnews.net/2018/06/renewed-crises-emerging-economies-imf-%e2%80%92-muddling/feed/0How Do You Attain “Sustainable Peace” Amidst Rising Military Conflicts?http://www.ipsnews.net/2018/05/attain-sustainable-peace-amidst-rising-military-conflicts/?utm_source=rss&utm_medium=rss&utm_campaign=attain-sustainable-peace-amidst-rising-military-conflicts
http://www.ipsnews.net/2018/05/attain-sustainable-peace-amidst-rising-military-conflicts/#commentsTue, 08 May 2018 14:00:08 +0000Thalif Deenhttp://www.ipsnews.net/?p=155672The underlying message at the fifth annual Stockholm Forum on Peace and Development was summed up in its telling title “The politics of peace.” But the task ahead was overwhelmingly difficult: How do you advance peace and development against the backdrop of political unrest in parts of Asia and Africa and continued conflicts in the […]

The opening panel of the Forum, 'The urgency and logic of investing in violent conflict'. Credit: SIPRI

By Thalif DeenSTOCKHOLM, Sweden, May 8 2018 (IPS)

The underlying message at the fifth annual Stockholm Forum on Peace and Development was summed up in its telling title “The politics of peace.”

But the task ahead was overwhelmingly difficult: How do you advance peace and development against the backdrop of political unrest in parts of Asia and Africa and continued conflicts in the Middle East— all of them amidst rising global military spending triggering arms sales running into billions of dollars.

In his opening address, the chairman of the Board of Governors of the Stockholm International Peace Research Institute (SIPRI) Jan Eliasson set the theme for the three day meeting when he declared: “No peace without development and no development without peace”.

“And none of the above without human rights,” said Ambassador Eliasson, the former Deputy Secretary-General of the United Nations.

The three-day meeting, May 7-9, was attended by more than 350 political leaders, high-level policy makers, academics and representatives of civil society organizations.

In his keynote address to the plenary, the President of the UN General Assembly (PGA) Miroslav Lajcak underlined the new UN concept of “sustaining peace” which has been the focus of two resolutions, one by the Security Council and the other by the General Assembly.

“It has spurred new initiatives. It has got us all talking – and acting,” he said.

And, two weeks ago, the UN hosted a High-Level Meeting on “Peacebuilding and Sustaining Peace”.

The meeting showcased some best practices. “We learned about how we are moving from stand-alone actors or activities for peace, to pooling our assets”, said Lajcak, who is also the Foreign Minister of Slovakia.

Providing one concrete example, the PGA said he actually saw this in action, when he travelled to the Colombian town of Totoró. “There, I saw a real commitment to peace – from the various United Nations Agencies, from government officials and from indigenous communities.”

“And, I saw how all these stakeholders could come together – under a United Nations inter-agency programme –for a common goal: to make the peace agreement stick.”

Secondly, he said, “we talked a lot about partnerships. Years ago, the United Nations was like an island. Too often, it acted alone. But, we have all, now, realised something important: Sustaining Peace is not owned by any one entity. It can only be achieved, if we all work together. “

“We heard, during the Meeting, that partnerships with regional organisations are particularly crucial. And, given where we are, today, this Forum is a good opportunity to look at how we can build up stronger links between the European Union and the United Nations, for Sustaining Peace.”

“Thirdly, I want to say this – very clearly: Not one discussion failed to have a gender dimension. And, I mean that. Not one.”

The other featured high-level participants at the Forum included Margot Wallstrom, the Foreign Minister of Sweden, Isabella Lovin, the Swedish Minister for International Development Cooperation and Climate Change, Gbehzohngar Milton Findley, Foreign Minister of Liberia, Adela Raz, Deputy Foreign Minister of Afghanistan and Hassan Hussein Hajji, Minister of Justice of Somalia.

Meanwhile, a new SIPRI report, released last week, highlights the rise in global military spending at a time when there is widespread speculation about a new cold war between the United States and Russia.

And US President Donald Trump’s public war-mongering and military threats against countries such as Iran, and until recently, North Korea -– is also likely to escalate military spending further.

And, most visibly, the continued conflicts in Syria and Yemen and the instability in Iraq, Libya and Afghanistan, have triggered a rise in arms spending and bolstered US and Western arms sales to the war zones in Asia and the Middle East.

Asked if there are any hopes of a decline in arms spending in the foreseeable future, Pieter Wezeman, Senior Researcher in the Arms and Military Expenditure Programme, at the Stockholm International Peace Research Institute (SIPRI), told IPS “right now there is little hope that global military expenditure will decrease in the near future.”

For 2017, he said, global military spending remained stable for yet another year.

However, this happened at a time that Russia had to decrease its military spending due to the bad economic situation in the country and the year after Saudi Arabia had cut its spending a lot, he explained.

“If those two countries will maintain ambitions to improve their armed forces, we can expect they will increase military spending as soon as their economies improve,” Wezeman predicted.

Saudi Arabia started to increase its spending in 2017, despite the continuing low oil prices. At the same time there are no indications that China will end the long lasting steady annual increases in its spending.

The decrease in US spending ended in 2016, according to Wezeman.

Trump has pushed for increases and a substantial increase in 2018 is likely. Finally, many states in Europe have started to increase their spending in response to heightened threat-perceptions towards Russia, and in relation to the conflicts in the Middle East.

On the contrary, doesn’t it appear that spending will also keep rising in the context of a “new cold war between the US and Russia?

He pointed out that the heightened tensions between the US and most of Europe on one side and Russia on the other are a clear motive for increased military spending.

However, rivalry between major states in the Asia Pacific region, roughly China on the side and the USA, India Japan on the other are also a major element, he declared.

In its report, released May 2, SIPRI said total world military expenditure rose to $1.7 tillion in 2017, a marginal increase of 1.1 per cent in real terms from 2016.

“Continuing high world military expenditure is a cause for serious concern”’ warned Ambassador Eliasson. It undermines the search for peaceful solutions to conflicts around the world.”

After 13 consecutive years of increases from 1999 to 2011 and relatively unchanged spending from 2012 to 2016, total global military expenditure rose again in 2017.* Military spending in 2017 represented 2.2 per cent of global gross domestic product (GDP) or $230 per person.

‘The increases in world military expenditure in recent years have been largely due to the substantial growth in spending by countries in Asia and Oceania and the Middle East, such as China, India and Saudi Arabia,’ said Dr Nan Tian, Researcher with the SIPRI Arms and Military Expenditure (AMEX) programme. ‘”At the global level, the weight of military spending is clearly shifting away from the Euro–Atlantic region”, he added.

]]>http://www.ipsnews.net/2018/05/attain-sustainable-peace-amidst-rising-military-conflicts/feed/1Money Talks at One Planet Summit in Parishttp://www.ipsnews.net/2017/12/money-talks-one-planet-summit-paris/?utm_source=rss&utm_medium=rss&utm_campaign=money-talks-one-planet-summit-paris
http://www.ipsnews.net/2017/12/money-talks-one-planet-summit-paris/#respondThu, 14 Dec 2017 12:27:17 +0000Paris Correspondenthttp://www.ipsnews.net/?p=153552As funding to combat climate change has lagged behind lofty words, the One Planet Summit in France this week invited governments and business leaders to put money on the table. The result was a significant number of international pledges – both for investment in green energy and divestment from fossil fuels – as various sectors […]

Patricia Espinosa, executive secretary of the United Nations Framework Convention on Climate Change, at the One Planet Summit in Paris. Credit: AM

By Paris CorrespondentPARIS, Dec 14 2017 (IPS)

As funding to combat climate change has lagged behind lofty words, the One Planet Summit in France this week invited governments and business leaders to put money on the table.

The result was a significant number of international pledges – both for investment in green energy and divestment from fossil fuels – as various sectors responded to the call from French President Emmanuel Macron for urgent action.Some of the drive at the summit came from small island states, which have been battered by recent hurricanes and other disasters.

“We’re not going fast enough,” Macron said at the Dec. 12 summit, which he co-convened with the United Nations and the World Bank. “Some countries present will see their territories disappear. We all have to move forward… The time is now.”

French multinational insurance company AXA announced that it plans to have 12 billion euros in green investments by 2020 and that it would divest 2.4 billion euros from certain coal-company activities.

Meanwhile the World Bank Group (WBG) highlighted its funding of projects in India for street lighting; in West Africa to tackle “coastal erosion, flooding and climate change adaptation”; in Indonesia regarding geothermal-power development; and with the Global Covenant of Mayors in a new “Cities Resilience Programme” (CRP).

“Over the next three years, the CRP will leverage $4.5 billion in World Bank loans to catalyze billions in public and private capital for technical assistance, project co-financing and credit enhancement,” said World Bank Group President Jim Yong Kim.

He said that the programme would essentially “act as an investment banker for cities to structure programs to address their vulnerabilities to climate change”.

Kim also announced that the World Bank would not be financing upstream oil and gas after 2019, but that in “exceptional circumstances”, consideration would be given to such financing in the “poorest countries” where there is a clear benefit in terms of “energy access for the poor”.

The bank said it was on track to meet its target of 28 percent of its lending going to climate action by 2020.

With these and other announcements, the One Planet Summit, held two years after the signing of the landmark Paris Agreement, aimed to add momentum to the push for adequate financing of climate adaptation and mitigation, said some observers, while others termed it a public-relations exercise.

The summit brought together heads of state, local government representatives, non-governmental organizations – and schoolchildren. Journalists were out in force, alongside United Nations delegations, at the Seine Musicale venue, an imposing new arts centre on an island in the river Seine, just outside Paris.

Government leaders arrived by boat with UN Secretary-General António Guterres, Macron and Kim, the co-convenors, for a packed afternoon of panel discussions and speeches, following morning events.

“Technological progress has already revealed the falsehood that responding to climate change is bad for the economy,” said Guterres. “Finance could be, should be and will be a decisive factor.”

Some of the drive at the summit came from small island states, which have been battered by recent hurricanes and other disasters.

Caribbean representatives announced the launch of a 8-billion-dollar investment plan to create the world’s first “climate-smart zone”. The bodies involved include the Inter-American Development Bank, the World Bank, the Caribbean Development Bank and private groups, forming a “Caribbean Climate-Smart Coalition”.

The goal is to find a way “to break through the systemic obstacles that stop finance flowing to climate-smart investments”, the Caribbean Development Bank said.

Juvenel Moȉse, Haiti’s president and a participant at the summit, spoke of the vulnerability of the region, emphasizing that all the islands are suffering from the impacts of climate change. He said that Haiti was in a “very fragile zone”.

American actor Sean Penn, also present, said he had got involved in helping Haiti to rebuild after the 2010 earthquake that devastated the country, and he said more financing was needed.

“I call on all those gathered to stand with Haiti,” he urged.

Meanwhile, Canada and the World Bank Group said they would support small island developing states to expand their renewable-energy infrastructure to achieve greater access to energy and to decrease pollution.

In side events around the summit, groups such as the International Development Finance Club (which groups 23 international, national and regional development banks from across the world), highlighted their “green financial flows”.

The group said that in 2016, IDFC members made new commitments representing 173 billion dollars in finance, an increase of 30 billion from 2015.

The eve of the summit, Dec. 11, was titled Climate Finance Day, and it was also the 20th anniversary of the Kyoto Protocol. Patricia Espinosa, the Executive Secretary of UN Climate Change (UNFCCC), told journalists that the long years of negotiations had provided a framework in which all sectors of society could take action, as governments “cannot do it alone”.

She said there was a growing sense of urgency, especially after recent extreme weather events that had seen some communities “losing everything they have built throughout their lives”. More support was needed for adaptation, she and other officials noted.

At the summit, the Agence Française de Développement – an IDFC member — signed accords with Mauritius, Niger, Tunisia and the Comoros – as part of the agency’s Adapt’Action Facility.

With financing of 30 million euros over four years, Adapt’Action seeks to “accompany 15 developing countries that are particularly vulnerable to climate change impacts, in the implementation of the Paris Agreement regarding adaptation,” the agency stated.

An official from Niger spoke compellingly of problems that included desertification. The country has been cited as an example of France not doing enough for its former colonies, and political analysts question whether that will change under Macron.

The European Union meanwhile said that its External Investment Plan (EIP) is set to mobilise some 44 billion euros to “partner countries in Africa and the EU Neighbourhood” by 2020.

Among its goals, the EIP aims to “contribute to the UN’s sustainable development goals while tackling some of the root causes of migration,” according to the EU.

Regarding Asia and the Pacific, officials at the summit said action by countries in the region were “encouraging”. Heads of state included the prime ministers of Bangladesh and Fiji, who spoke of their climate initiatives. Fiji’s Prime Minister Frank Bainimarama said the country was among the first emerging states to offer a green bond.

The international nature of the summit made the U.S. absence even more noticeable. As U.S. President Donald Trump had announced earlier this year that the country would withdraw from the Paris Agreement, he was not invited, French officials said.

Other American climate figures were present, however, such as businessman and former New York Mayor Michael Bloomberg, former California governor and actor Arnold Schwarzenegger, Microsoft founder Bill Gates and former Secretary of State John Kerry.

Bloomberg said that around the world, businesses were taking “responsible” action because investors want to put their money in environmentally friendly companies.

Still, for some NGOs, not enough is being done, and the summit was more of what they had heard before.

“If governments and business are sincere in their commitment to the goals of the Paris Agreement, they would cease their financing of dirty and harmful energy projects around the world and would instead accept their responsibility for providing public finance to address climate change instead of letting business dictate the agenda,” said Meena Raman of Third World Network.

A man pushes a cartful of garbage near a busy intersection in Yangon, Myanmar. Credit: Amantha Perera/IPS

By Jomo Kwame SundaramKUALA LUMPUR, Aug 22 2017 (IPS)

Following the 2007-2008 global financial crisis and the Great Recession in its wake, the ‘new normal’ in monetary policy has been abnormal. At the heart of the unconventional monetary policies adopted have been ‘asset purchase’ or ‘quantitative easing’ (QE) programmes. Ostensibly needed for economic revival, QE has redistributed wealth – regressively, in favour of the rich.

As its failure to revive most economies becomes apparent, and opposition to growing inequality rises, QE may soon end, judging by recent announcements of some major central banks. Already, the US Federal Reserve and the Bank of England have been phasing out purchases of financial assets, while the European Central Bank (ECB) is publicly considering how quickly to do so from December. Meanwhile, these monetary authorities are considering raising interest rates again.

Evaluated by its own declared objectives, QE has been a failure. Forbes magazine, the self-avowed ‘capitalist tool’, has acknowledged that QE has “largely failed in reviving economic growth”. By ‘injecting’ money into the economy, QE was supposed to induce banks to lend more, thus boosting investment and growth. But in fact, overall bank lending fell after QE was introduced in the UK, with lending to small and medium sized enterprises (SMEs) – responsible for most employment – falling sharply.

Bank failure to finance productive investments was not because corporations were short of cash as they have considerable reserves. Instead, the problem is due to under-consumption or overproduction, exacerbated by protracted stagnation and worsening inequality. After all, producing more when demand is soft or shrinking only leads to excess supply or gluts.

QE’s regressive wealth distribution

But QE has transferred wealth and income to the rich in the guise of reviving the world economy. New money created by QE was not invested in new productive activities, but instead mainly flowed into stock markets and real estate, pushing up share and property prices, without generating jobs or prosperity. QE has enriched asset owners, increasing the wealth of the rich, while not generating real wealth.

By effectively devaluing currency, QE has diminished money’s buying power, thus reducing real incomes. However, first-time or new asset purchasers lose, having to spend more to buy more expensive assets such as shares or real property. While increased asset prices have to be paid by purchasers, the additional cost to existing asset owners is partially compensated for by higher prices received for assets sold.

Thus, the claim that QE would encourage investment as well as boost growth and employment has disguised the massive redistribution or wealth transfer to the rich. QE, especially in the US and UK, has seen real wages fall as profits rose. While output may have recovered, real wages have been generally lower.

In the South too

QE has had similar effects in the global South, enriching asset owners at the expense of the ‘asset-poor’, while making their economies more vulnerable. QE also caused housing, stock market and commodity price bubbles as speculators rushed to buy up such assets. Until petrol prices fell in late 2014, oil-exporting countries enjoyed cash windfalls, at the expense of oil-importing countries, sometimes with devastating consequences, even if only temporary.

QE triggered huge capital flows into the developing world. Around 40 percent of the US Fed’s first QE credit expansion and a third from QE2 went abroad, mostly to ‘emerging markets’. Much of this went into buying existing assets, rather than into productive new investments. And if their currencies strengthened, their exports were undermined.

On the other hand, QE also exacerbated competitive currency devaluations. By reducing the value of their own currencies, ‘reserve currency’ monetary authorities effectively caused other currencies to appreciate, damaging their exports and trade balances.

With various recent developments conspiring to reverse the last several years of unconventional monetary policies in the North, emerging markets and other developing economies are generally poorly prepared for the forthcoming change in circumstances.

While policy options in different scenarios are already being publicly considered in the Western reserve currency economies, an ostrich-like approach of not discussing and preparing for such changes is much more widespread in other economies, with potentially catastrophic consequences.

Jomo Kwame Sundaram, a former economics professor, was United Nations Assistant Secretary-General for Economic Development, and received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought in 2007.

Azza Karam is Senior Advisor, UNFPA and Coordinator, UN Interagency Task Force on Religion and Development

By Azza KaramUNITED NATIONS, Jul 4 2017 (IPS)

A decade ago, it was difficult to get Western policy makers in governments to be interested in the role of religious organizations in human development. The secular mind-set was such that religion was perceived, at best, as a private affair. At worst, religion was deemed the cause of harmful social practices, an obstacle to the “sacred” nature of universal human rights, and/or the root cause of terrorism. In short, religion belonged in the ‘basket of deplorables’.

Yet, starting in the mid-1990s with then President of the World Bank, James Wolfenson, and celebrated in 2000 under then UN Secretary-General Kofi Anan when the Millenium Development Goals were agreed to, a number of religiously-inspired initiatives coalesced, all trying to move ‘religion’ to international development’s ‘basket of desirables’.

The arguments used to begin to generate positive interest in the role of religious NGOs in international multilateral fora were relatively straightforward. Today they are almost a cliche: religious institutions are the oldest social service providers known to human kind, and several basic health and educational institutions of today, are administered or influenced to some extent, by religious entities.

So if we are serious about strengthening health systems and universal access to healthcare, enhancing educational institutions, content and accessibility, protecting our environment, safeguarding the rights of marginlised and vulnerable populations, countering social exclusion and ensuring human dignity, then – the argument is – we have to work with those who influence minds, hearts, and continue to provide and manage significant amounts of social services in most countries. Facts and figures as to how many social services are provided by/through religious institutions continue to be provided and roundly disputed.

The number of initiatives within the secular multilaterals – like the UN – which focused on ‘religion and development’ began to slowly attract the attention (and the money) of some western donor governments such as Switzerland and Norway, both of whom were keen on mobilising religious support for women’s rights in particular. Some governments (such as the USA and the UK) dabbled in engaging with religious NGOs both at home in their own countries, and supporting some of them in their development and humanitarian work abroad.

Nevertheless, from a multilateral perspective, the larger tapestry of western donor support to efforts around religion, tended to be marginal – dipping toes in the water rather than taking a plunge.

With the increasing presence of al-Qaeda on the world stage in 2001, and the subsequent war in Iraq and Afghanistan, the world witnessed the emerging gruesome hydras of religious extremism, at once fueling, and being fueled by, the phenomena of ultra nationalism, racism, xenophobia and misogyny. Some western governments spoke openly of engaging religious actors in counter-terrorism, but this narrative was fraught with political tensions.

It was only when migrants appeared to ‘flood’ European shores (albeit in numbers which are only a fraction of those ending up in developing countries), that there was a noticeable surge of keen interest by several western governments in ‘this religion thing’.

For the UN developmental entities who had invested significantly to generate the interest of their largest western donors in the relevance of religions to development, spurred by the learning from the MDGs and with a view to realizing Agenda 2030, there was a noticeable volte face which was taking place right under their noses.

Almost overnight, UN-steered initiatives to engage with religious actors and enhance partnerships around health, education, environment, women’s rights, humanitarian work, all of which had been painstakingly prepared and backed by years of research, consultations, networking and shared practice (as the work of the UN Interagency Task Force on Religion and Development testifies) became the object of desire by some governments.

Rather than seek to support the UN in continuing to engage with this work and the critical partnerships developed and labored over for years, however, the objective of these governments is to seek to directly manage the convening, networking and funding roles of faith-based entities, ostensibly with the same objectives of achieving the SDGs.

But there is a critical difference between the UN convening and working with faith-based organizations and religious leaders, and one or a handful of governments doing so. To survive, to thrive, and to protect human rights, the agenda of multilateral entities has to remain distinct from the national self-interest of any one government – or a handful thereof – no matter how powerful this government (or these governments), may be.

This applies to all issues, constituencies and types of partnerships outlined in SDG 17. But the argument here is even more powerful: that where religions are concerned, the need for unbiased and non-partisan engagement with religious actors, distinct from any one nation’s self-interest, is crucial.

If there is suspicion about the role of a non-western government in supporting religious actors in countries outside of its own, then why do we not also suspect western governments of involving themselves in supporting religious efforts in countries other than their own?

This question becomes especially pertinent when we begin to look at the religious composition of the western governments now keen on ‘supporting religion and development’ abroad – they are mostly Christian. And if we look at the governments viewed with much suspicion who have long been supporting religious engagement overseas (also for development and humanitarian purposes, one might add), they tend to be Muslim. A coincidence perhaps?

To avoid these kinds of questions, it would behoove all concerned parties interested in achieving the significant targets of the Sustainable Development Goals, and with a view to endorsing the United Nations’ mandate of safeguarding peace and security and protecting human rights, to support the efforts of the UN system in engaging the whole of civil society.

Rather than efforts driven by some governments, to work with select religious actors, in some countries, the challenge (which is fully achievable) is to strengthen the multi-faith and broad-based civic coalitions of legally registered, bona fide NGOs, working with and known to their governments and to the UN entities, at national, regional and global levels, to deliver for the world.

Otherwise, the danger is that such efforts will be misconstrued as the new colonial enterprise in international development, playing into rising religious tensions globally. History is replete with examples where mobilizing religious actors in other countries, no matter how well-intentioned, can create some rather unholy alliances.

]]>http://www.ipsnews.net/2017/07/religion-new-colonial-frontier-international-development/feed/0What can Development Banks do to Protect Human Rights?http://www.ipsnews.net/2016/07/what-can-development-banks-do-to-protect-human-rights/?utm_source=rss&utm_medium=rss&utm_campaign=what-can-development-banks-do-to-protect-human-rights
http://www.ipsnews.net/2016/07/what-can-development-banks-do-to-protect-human-rights/#respondSun, 17 Jul 2016 01:39:09 +0000Phillip Kaedinghttp://www.ipsnews.net/?p=146090In a petition signed by 150 NGOs, the Coalition for Human Rights in Development have called for development banks to make sure that human rights are respected by their beneficiaries. Multilateral development banks like the World Bank or the European Investment Bank (EIB) often work with governments and corporations planning mega projects in developing countries. For example, […]

In a petition signed by 150 NGOs, the Coalition for Human Rights in Development have called for development banks to make sure that human rights are respected by their beneficiaries.

Multilateral development banks like the World Bank or the European Investment Bank (EIB) often work with governments and corporations planning mega projects in developing countries. For example, Dutch, Finnish and Central American banks had all funded the Agua Zarca dam in Honduras, the same dam environmental activist Berta Cáceres, was murdered for protesting against.

Organizations like Human Rights Watch and Oxfam say that the financiers also bear responsibilities when local peoples’ rights are abused to help facilitate projects. The petitioners want the development banks to stand up for human rights in the regions where they fund projects.

The new petition states that “Global Witness identified 2015 as the worst year on record for killings of land and environmental defenders, with 185 killings across 16 countries.”

The prominent case of Berta Cáceres is no exception. Soleyana Gebremichael, Ethiopian blogger talked about the situation in her home country at a press conference on Thursday:

“For the last 10 years, the civil society space had been shrinking. Ethiopia enacted two laws in 2009: The first one is the civil society proclamation and the second one was the anti-terrorism proclamation. The civil society proclamation… basically limits the activities of civil society organisations by limiting their resources.”

Gebremichael, who received the International Press Freedom Award with her co-bloggers from Zone 9 in 2015, said that the development banks should work together with civil society organizations on the issues, as a way to work with governments without pressuring them directly.

Often, the banks argue that they do what they can,said Jessica Evans, senior international financial institutions advocate at Human Rights Watch.

“In the case of Uzbekistan, we have been told by World Bank officials that they have behind those doors raised concerns with the government of Uzbekistan about the attacks against the independent human rights defenders that are monitoring forced labor and other human rights abuses linked to the agriculture sector. This had no impact whatsoever,” she said.

How does such a constellation emerge? Mandeep Tiwana, Head of Policy and Research at Civicus, blames entanglements between politics and the economy:

“States are increasingly outsourcing their responsibilities… This leads to an increased avenue to corruption due to collusion among elites. Civil society organizations, when they try to expose these corrupt links between elites, are attacked.”

“What we are seeing is that the multilateral development banks are continuing on business as usual rather than working with the human rights defenders themselves to put pressure on governments and others that are attacking them.” -- Jessica Evans, HRW.

The development banks, Tiwana argues, support growth-oriented development programs as in Ethiopia and therefore ignore other issues. He sees a neoliberal paradigm at the bottom of the problem.

More than the historical and political causes, the practical solution is what international NGOs are now interested in. The petition addressing all major multilateral development banks suggests seven steps:

First, the banks “should systematically analyze the environment for freedoms of expression, assembly, and association, and the realization of other human rights critical for development. Once they have undertaken this analysis they should build it into their country development strategies,” said Evans.

Then, the Coalition emphasizes, policies to increase accountability and secure human rights considerations in every project must be implemented.

The agenda is quite ambitious. But according to Tiwana, it is essential to target the links between financial institutions and governments together with local civil society organizations.

“Development banks often work with large state-entities and state-entities often enable the participation of several private actors, some of them could be linked to very influential people.”

“So the public has a very important role to play in ensuring that the deals that are made… have gone through the constitutional and lawful discourse. And that’s why civil society is extremely important to shine a spotlight on these contracts and on these activities,” he says.

In many ways, the issued statement appeals to the conscience of Western bank managers and policy-makers. New conflict is likely to occur with multilateral banks from the East like the Asian Infrastructure Investment Bank (AIIB) entering the big stage of development financing. The AIIB is also addressed in the petition.

Months ago, Amnesty International and others pointed out that human rights standards are not the AIIB’s priority. A race to the bottom regarding human rights in development projects is a huge danger in the eyes of the Coalition for Human Rights in Development.

There is a “broader pattern which is emerging as the result of multilateral development banks failing to prioritize public participation in the work that they do and refusing to meaningfully work to prevent reprisals,” says Evans.

“What we are seeing is that the multilateral development banks are continuing on business as usual rather than working with the human rights defenders themselves to put pressure on governments and others that are attacking them.”

]]>http://www.ipsnews.net/2016/07/what-can-development-banks-do-to-protect-human-rights/feed/0What Does it Really Mean to “Leave No One Behind”? http://www.ipsnews.net/2016/07/what-does-it-really-mean-to-leave-no-one-behind/?utm_source=rss&utm_medium=rss&utm_campaign=what-does-it-really-mean-to-leave-no-one-behind
http://www.ipsnews.net/2016/07/what-does-it-really-mean-to-leave-no-one-behind/#respondWed, 13 Jul 2016 03:33:30 +0000Aruna Dutthttp://www.ipsnews.net/?p=146017Although “leave no one behind” has become a central rallying cry around the UN’s Sustainable Development Goals, more needs to be done for it to be put into practice, civil society said during a review conference of progress made on the Post-2030 agenda here this week. Unlike the UN’s Millennium Development Goals (MDGs) which failed to address structural […]

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]]>http://www.ipsnews.net/2016/07/what-does-it-really-mean-to-leave-no-one-behind/feed/0China-led Development Bank Pledges $500 Million to Asian Projectshttp://www.ipsnews.net/2016/07/china-led-development-bank-pledges-500-million-to-asian-projects/?utm_source=rss&utm_medium=rss&utm_campaign=china-led-development-bank-pledges-500-million-to-asian-projects
http://www.ipsnews.net/2016/07/china-led-development-bank-pledges-500-million-to-asian-projects/#commentsThu, 07 Jul 2016 15:11:20 +0000Thalif Deenhttp://www.ipsnews.net/?p=145963The Beijing-based Asian Infrastructure Investment Bank (AIIB), which was launched last year with the aim of funding projects on a continent with some of the world’s most populous nations, has pledged over $500 million in four concessional loans to Bangladesh, Indonesia, Pakistan and Tajikistan. All projects, to be funded by the AIIB, will be “lean, […]

The Beijing-based Asian Infrastructure Investment Bank (AIIB), which was launched last year with the aim of funding projects on a continent with some of the world’s most populous nations, has pledged over $500 million in four concessional loans to Bangladesh, Indonesia, Pakistan and Tajikistan.

All projects, to be funded by the AIIB, will be “lean, green and clean”, according to the bank’s President Jin Liqun.

“The bank was born with the birthmark of China, but its upbringing is international,” he said, as the 57-member bank also includes Britain, France and Germany.

Martin Khor, Executive Director of the Geneva-based South Centre, told IPS: “The AIIB is a very important initiative whose time has come.”

For so many decades, he pointed out, the international development bank arena was led by the developed countries and there has been so much criticism about the governance system in which the developing countries have a minority of voting rights.

“The AIIB is an institution with a different governance structure with developing countries in the majority but with also participation from many developed countries that decided to join,” he added.

Moreover, said Khor, the AIIB is filling in a deficiency because it is funding the infrastructure needs of developing countries.

The first board meeting last month — and the first projects approval– show that the bank is finally operating, and smoothly too.

“The management has also proclaimed that global standards on environmental and social safeguards will be adopted for the projects. I hope they keep to this promise.”

The whole operation of the new bank, he noted, will be a great challenge for the developing countries, especially China, which had conceptualized the bank and has the highest equity share, to demonstrate they can lead a successful development bank.

“I am confident the bank will be successful,” predicted Khor.

Last month, the Board of Directors approved the Bank’s first four project-loans financing investments in power distribution and expansion in Bangladesh; road improvements in Tajikistan; highway construction in Pakistan; and slum upgrading in Indonesia.

The Bangladesh project was the Bank’s first stand-alone operation, and the other three projects are co- financing operations with the Asian Development Bank (ADB), the European Bank for Reconstruction and Development (EBRD) and World Bank, respectively.

Both the United States and Japan have so far declined to join the bank.

Asked about the role of the US, State Department spokesman John Kirby told reporters last year: “We’ve noted that China has expressed an interest in leading this effort”.

Obviously, other countries are deciding for themselves the degree to which that they want to participate in this.

“What’s, I think, is important for us – and this was part of the discussion that we had with the Chinese when they were here – is that we welcome the rise of a peaceful, prosperous China; a China that contributes to stability and security, which does include economic dimensions in the region.”

“But the participation of other countries in this are obviously sovereign decisions they have to make. And we’ll just – we’ll see where it goes,” Kirby added.

“The AIIB was also going to play a part in China's efforts to project soft power. Importantly, many developing countries of the Asia-Pacific region had always wanted to see established a lending institution that did not lend with cumbersome and unacceptable strings attached." -- Palitha Kohona.

Palitha Kohona, the former Permanent Representative of Sri Lanka to the UN, told IPS the AIIB was China’s response to some immediate practical challenges that were emerging in the Asia-Pacific region.

Despite acquiring the status of the world’s second biggest economy, China’s influence in the Bretton Woods institutions (the World Bank and the International Monetary Fund) was limited as the voting power and the senior staff positions in them were dominated by the US and its allies, said Kohona, who has a track record of successfully negotiating with the Chinese.

He said China naturally wished to secure a bigger role in global development and finance, commensurate with its newly acquired stature.

Furthermore, China had accumulated vast financial reserves which it was now seeking to deploy in a secure and mutually advantageous manner, he argued.

“The AIIB was also going to play a part in China’s efforts to project soft power. Importantly, many developing countries of the Asia-Pacific region had always wanted to see established a lending institution that did not lend with cumbersome and unacceptable strings attached. The AIIB was a response to these needs”.

“Although the US and some of its allies talked about the possibility of lending standards being diluted and political considerations influencing decisions, one needs to remember that the West always used the Bretton Woods institutions to advance their political objectives.”

The conditionality that accompanied IMF lending invariably resulted in street riots and deaths. Wikileaks famously revealed how Hillary Clinton as Secretary of State attempted to prevent the IMF from extending a standby loan facility to Sri Lanka which was at the time on the verge of militarily defeating the Tamil Tigers after 27 years of deadly conflict and who were designated as a foreign terrorist group by the US itself, said Kohona.

“The US lobbied hard to prevent its allies from joining the AIIB. But with the prospect of their own companies participating in infrastructure development projects, many Western countries with ailing economies, broke ranks and joined the Bank. Australia, New Zealand, Germany, the UK, and France being among them. China clearly established itself as a lead player in global finance and development through the AIIB, Kohona declared.

In June, AIIB President Jin Liqun and Chinese Vice Minister of Finance Shi Yaobin signed a Contribution Agreement on China’s $50 million contribution to the newly established AIIB Project Preparation Special Fund (the Fund).

The Fund is aimed at supporting Bank members in preparing “sound project proposals”. China’s contribution, the first to the Fund, will allow it to be operational in the fall of 2016.

According to AIIB, the Fund is expected to provide grants to the Bank’s low and middle income member countries for preparation activities, including environmental, social, legal, procurement and technical assessments and analyses, and advisory services. The Bank will seek additional contributions to ensure the Fund’s sustainability.

Although Asia faces a huge infrastructure financing gap, Jin said, there is a shortage of ‘shovel-ready’ bankable projects owing to the capacity limitations.

“Our members have highlighted these constraints during the Bank’s establishment process. I am delighted that our Board has responded to our members’ needs very quickly through the establishment of this Fund. We are very appreciative of China’s timely and generous contribution which will allow us to kick- start the Fund, and have it operational in the autumn.”

]]>http://www.ipsnews.net/2016/07/china-led-development-bank-pledges-500-million-to-asian-projects/feed/1The Case for Cash in Humanitarian Emergencieshttp://www.ipsnews.net/2016/06/the-case-for-cash-in-humanitarian-emergencies/?utm_source=rss&utm_medium=rss&utm_campaign=the-case-for-cash-in-humanitarian-emergencies
http://www.ipsnews.net/2016/06/the-case-for-cash-in-humanitarian-emergencies/#respondTue, 28 Jun 2016 22:23:50 +0000Phillip Kaedinghttp://www.ipsnews.net/?p=145860Currently only six percent of humanitarian aid worldwide comes in the form of cash handouts, yet many aid organisations believe that cash transfers should be seen as the rule, not the exception. Both the World Food Program (WFP) and World Vision International, who work together in Somalia, South Sudan and other crisis-ridden countries, stressed the advantages […]

Currently only six percent of humanitarian aid worldwide comes in the form of cash handouts, yet many aid organisations believe that cash transfers should be seen as the rule, not the exception.

Both the World Food Program (WFP) and World Vision International, who work together in Somalia, South Sudan and other crisis-ridden countries, stressed the advantages of cash instead of in kind allowances at a meeting held here Monday.

“There is no longer a question about ‘does cash work’ or ‘is cash the right tool’,” said Amir Mahmoud Abdulla, Deputy Executive director of the WFP.

George Fenton of World Vision explained:

“Digital humanitarian cash transfers are one of the most significant and most exciting innovations of today. They offer… a greater dignity, choice and flexibility for crisis-affected people.”

Due to increasingly widespread mobile phone ownership, cash transfers are now often made digitally. In some circumstances, including refugee camps, aid organisations may hand out cash directly.

The transfers are usually given unconditionally, since this is considered an effective way to provide assistance to a person in need. Whereas in-kind assistance such as food or materials, may not suit the specific needs of the recipient, cash transfers allow recipients to spend money on their most urgent needs, while also supporting local markets.

“Cash transfers turn notions of aid and charity on their head. Rather than the giver deciding that people need food or clothes, the choice is with the people themselves," -- Sarah Bailey.

However, while cash transfers have been considered successful in the settings where they have so far been rolled out, humanitarian organisations, such as the World Bank now want to work out how to make wider use of the concept. As Amir Abdulla put it: “How do we take it to scale?”

In order to do this, some obstacles need to be overcome, methods of delivery have to be streamlined and there has to be a response to the “need to marry cash and technology,” as Fenton puts it.

Colin Bruce, senior advisor to the World Bank President, told the meeting about upcoming challenges: “Until we can better coordinate those processes (needs assessments and response analyses), it’s going to be very difficult to get the kind of upstream thinking, funding and programming necessary to take cash to scale.”

Secondly, a “change in mindsets” has to take place, as Sarah Bailey told IPS this week. Bailey is a Research Associate at the Overseas Development Institute (ODI) and Secretariat Manager of the High Level Panel on Humanitarian Cash Transfers which produced the report DoingCash Differently. She explained to IPS that “cash transfers turn notions of aid and charity on their head. Rather than the giver deciding that people need food or clothes, the choice is with the people themselves.”

The desired shift to cash-based aid is closely linked to the fund-raising side of humanitarian programs. Charlotte Lattimer of the non-profit research organization Development Initiatives emphasized that although funding increased in the last year, there still exists “an enormous shortfall in terms of meeting humanitarian needs”.

Donors are increasingly asking for more transparency and more precise reporting on exactly how funds are spent, which is difficult if it is spent by the recipients instead of the aid organization.

Still “cash transfers are a tangible opportunity for more aid transparency because it’s easier to track the movement of money than the movement of food and buckets. Far from cash transfers being a risk to accountability, cash can be a vehicle for it,” Bailey told IPS.

Further research may help determine whether cash transfers can provide the transparency donors ask for. With innovations in the field of digital transactions and mobile banking and payment, the infrastructure for new aid delivery concepts improves year by year.

It is this development that aid organizations hope will catch the attention of donors. Bailey explained to IPS why she is convinced that cash transfers will become more and more important. At the end of the day, financial arguments decide financial questions: “Delivering cash is cheaper than delivering in-kind aid. You do not need to rent a warehouse and hire a driver to get money to people. As aid agencies use cash more it will become even cheaper with economies of scale.”

]]>http://www.ipsnews.net/2016/06/the-case-for-cash-in-humanitarian-emergencies/feed/0Making Sustainability Part of the Corporate DNAhttp://www.ipsnews.net/2016/06/making-sustainability-part-of-the-corporate-dna/?utm_source=rss&utm_medium=rss&utm_campaign=making-sustainability-part-of-the-corporate-dna
http://www.ipsnews.net/2016/06/making-sustainability-part-of-the-corporate-dna/#respondSat, 25 Jun 2016 17:26:44 +0000Phillip Kaedinghttp://www.ipsnews.net/?p=145814Companies, governments and non-profit actors agree that economic growth and sustainable development have to go hand in hand to shape our increasingly globalised world in a fair way. Yet a meeting of leaders from the business, government and non-profit sectors at the UN this week showed that there is still a long way to go in […]

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]]>http://www.ipsnews.net/2016/06/making-sustainability-part-of-the-corporate-dna/feed/0Least Developed Countries’ Vulnerabilities Make Graduation Difficulthttp://www.ipsnews.net/2016/06/least-developed-countries-vulnerabilities-make-graduation-difficult/?utm_source=rss&utm_medium=rss&utm_campaign=least-developed-countries-vulnerabilities-make-graduation-difficult
http://www.ipsnews.net/2016/06/least-developed-countries-vulnerabilities-make-graduation-difficult/#respondSat, 25 Jun 2016 02:25:40 +0000Ahmed Sareerhttp://www.ipsnews.net/?p=145797Ambassador Ahmed Sareer is Permanent Representative of Maldives to the UN and chairman of the Alliance of Small Island States (AOSIS).

An aerial view of the Village of Kolhuvaariyaafushi, Mulaaku Atoll, the Maldives, after the Indian Ocean Tsunami.
UN Photo/Evan Schneider

By Ahmed SareerUNITED NATIONS, Jun 25 2016 (IPS)

Last month, over two thousand high-level participants from across the world met in Antalya, Turkey for the Midterm Review of the Istanbul Programme of Action, an action plan used to guide sustainable economic development efforts for Least Developed Countries for the 2011 to 2020 period. The main goal was to understand the lessons learnt by the world’s Least Developed Countries (LDCs) over the past five years and apply the knowledge moving forward.

For my country, the Maldives, the past five years have been a chance to experience first-hand the realities of life after graduation from LDC status. In January 2011, the Maldives was officially removed from the list of LDCs, the culmination of decades of hard work and determined efforts of developing the country. The Fourth UN Conference on LDCs, held in May 2011, was the last for the Maldives as an LDC, but last month in Antalya, we went back because we believed it was important to share the lessons we had learnt since 2011.

While our graduation was naturally a moment of pride and cause for celebration for a country only 50 years old, it was accompanied by a sense of uncertainty about the challenges we would face following the withdrawal of the protections and special preferences afforded to LDCs.

Ultimately, we were able to forge ahead in spite of these difficulties and adapted to the new realities. We ensured that our economy, driven by a world-class tourism sector, and a robust fisheries industry, would continue to be competitive and dynamic. We focused on fostering a business-friendly climate, while making prudent investments for future growth.

However, we remain conscious of the degree to which the gains we have made are vulnerable to exogenous shocks. On 20 December 2004, the United Nations General Assembly (UNGA) decided to graduate the Maldives effective 1 January 2008. But just four days before the UNGA decision, a catastrophic tsunami swept across the Indian Ocean, claiming the lives of over 275,000 people in fourteen countries.

The 2004 tsunami was especially devastating in the Maldives. With the highest point in our country being just 2.5 metres high, virtually all of it was, for a few harrowing minutes, underwater.

Several islands were rendered uninhabitable; nearly one in ten people were left homeless.

Farms were destroyed, the fresh water lens corrupted, with large-scale loss to infrastructure. The economic cost of the destruction was equivalent to close to 70 percent of GDP, a blow from which it took us over a decade to recover.

The Maldives is not alone in facing such vulnerabilities. For many countries, particularly Small Island Developing States (SIDS) such as our own, an end to LDC status does not necessarily herald the disappearance of structural barriers to growth—such as limited access to markets, geographical isolation, environmental pressures, or difficulty achieving economies of scale.

By 1997, the Maldives had already exceeded two of the three thresholds that determine LDC status—GNI per capita, and the Human Capital Index, measured in terms of undernourishment, child mortality rates, secondary school enrolment rates, and adult literacy.

But we did not exceed the threshold for the third criterion, the Economic Vulnerability Index (EVI), which measures the structural vulnerability of countries to exogenous economic and environmental shocks – we did not meet this threshold to date. It is not necessary to meet all three thresholds to in order to graduate—meaning we were considered ready for graduation.

As the tragedy of 2004 taught us, persistent vulnerabilities have the potential to undermine, if not reverse, gains made towards development. Despite meeting the formal requirements, we were not yet ready. The lessons of our own experiences have meant that the Maldives has been consistent in calling for a smoother and more holistic approach to the graduation process.

Firstly, the criteria for graduation must account for the structural vulnerabilities of developing countries. The fact that economic vulnerability can be disregarded in determining whether a country is ready to graduate from LDC status represents a critical oversight.

Second, the Economic Vulnerability Index itself must also be redesigned to better account for vulnerability. At present, the index fails to account for key considerations such as geographic and environmental vulnerability, import dependency, and demographic pressures.

With greater attention being paid to the effects of climate change on developing countries, most notably in the Sustainable Development Goals (SDGs), evaluating vulnerabilities more comprehensively is a task that has acquired even greater importance.

Lastly, the extension of support and assistance to countries must be determined on the basis of their individual capabilities and challenges, rather than their mere place on a list. We would be remiss to overlook the role that development assistance, including that provided by the UN, has played in helping the Maldives progress—as it has for many others—particularly in regards to our work in disaster preparedness and climate change mitigation.

The withdrawal of such assistance—including preferential trade access and concessionary financing—following our graduation from the ranks of the LDCs has meant increased fiscal challenges. This disregards the unique challenges faced by countries like the Maldives due to their specific structural constraints—constraints ignored under the present graduation regime.

While efforts have been made to smooth the graduation process for LDCs—in 2004, and most recently in 2012—the process remains deeply flawed and in need of comprehensive reform. To this end, the Maldives has called for the World Trade Organization (WTO) to extend the application of TRIPS (trade-related aspects of intellectual property rights) for all LDCs, in addition to the exploration of a “small and vulnerable economy” category at the United Nations, which would recognize the particular needs of such countries.

Similarly, we must move towards devising measures of development that do more than just record national income, and instead provide a more meaningful assessment of national capability and capacity, for which GDP can often be a poor proxy.

No country wishes to be called “least developed”, much less remain in that classification indefinitely, but the factors driving underdevelopment must be meaningfully dealt with if we wish to attain genuinely sustainable development. It is for this reason that we believe that the desire by countries to eradicate poverty and achieve economic development must be met with commitment on part of the United Nations and other organizations to chart a realistic and holistic path towards that end.

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]]>http://www.ipsnews.net/2016/06/world-bank-slightly-downgrades-global-economic-prospects-for-2016/feed/0Mega Dams Remain Controversial Source of Energyhttp://www.ipsnews.net/2016/06/mega-dams-remain-controversial-source-of-energy/?utm_source=rss&utm_medium=rss&utm_campaign=mega-dams-remain-controversial-source-of-energy
http://www.ipsnews.net/2016/06/mega-dams-remain-controversial-source-of-energy/#respondMon, 06 Jun 2016 03:04:47 +0000Lyndal Rowlandshttp://www.ipsnews.net/?p=145454Although mega dams can have devastating impacts on ecosystems and indigenous communities, many of the world’s poorest countries still see them as a way to fill gaping holes in their energy supplies. One such project is the Inga III dam, in the Democratic Republic of Congo (DRC). The dam is a part of the larger […]

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]]>http://www.ipsnews.net/2016/06/mega-dams-remain-controversial-source-of-energy/feed/0Toasting to a More Sustainable Planet with Argentine Winehttp://www.ipsnews.net/2015/10/argentine-wine-to-toast-for-a-more-sustainable-planet/?utm_source=rss&utm_medium=rss&utm_campaign=argentine-wine-to-toast-for-a-more-sustainable-planet
http://www.ipsnews.net/2015/10/argentine-wine-to-toast-for-a-more-sustainable-planet/#respondTue, 20 Oct 2015 21:37:50 +0000Fabiana Frayssinethttp://www.ipsnews.net/?p=142748The region of Cuyo in west-central Argentina is famous for its vineyards. But it is one of the areas in the country hit hardest by the effects of climate change, such as desertification and the melting of mountain top snow. And local winegrowers have come up with their own way to fight global warming. In […]

Vineyards belonging to the Dominio del Plata winery in Luján de Cuyo in the Argentine province of Mendoza. It is one of the companies taking part in the Federal Programme for Cleaner Production, which involves a sustainable reconversion inthe wine-growing industry. Credit: Fabiana Frayssinet/IPS

By Fabiana FrayssinetLUJÁN DE CUYO, Argentina , Oct 20 2015 (IPS)

The region of Cuyo in west-central Argentina is famous for its vineyards. But it is one of the areas in the country hit hardest by the effects of climate change, such as desertification and the melting of mountain top snow. And local winegrowers have come up with their own way to fight global warming.

In the cup, malbec, Argentina’s flagship red wine, still has the same intense flavour and colour.

But behind the production process is a new environmental reconversion, which began four years ago in the arid province of Mendoza, where vineyards bloom in the midst of oases created by human hands.

Only 4.8 percent of the desert province of Mendoza is green; 3.5 percent is dedicated to agricultural production, which uses 90 percent of the water consumed, and the rest is urban areas.“Many people think investing in ecological practices has an additional cost and won’t necessarily bring the company any benefits. This shows that is not the case.” -- René Mauricio Valdés

“We are trying to maintain the same production levels, using less water and less energy, reducing waste, reusing waste products, and creating less pollution,” the provincial coordinator of the Federal Programme for Cleaner Production, Germán Micic, told Tierramérica.

The initiative, launched by the national Secretariat of the Environment and Sustainable Development, benefits some 1,250 small and medium-sized companies in Argentina.

“We’re producing the same wine, but in a sustainable manner,” said Luis Romito, the head of the Sustainability Commission of the Bodegas de Argentina wineries association, while participating in the Climate Change Forum organised this month in Mendoza by the National University of Cuyo and the UNDP.

Some of these practices have begun to be implemented by Dominio del Plata, a family winery at the foot of the Andes mountains, in Agrelo, a town in the department of Luján de Cuyo.

By changing equipment and modifying processes, the family business has managed to use less water in the production of its wine.

In the wine production process, water is mainly used for washing, rinsing, heating and cooling.

One example of the changes introduced was the replacement of manual washing of the grape picking lugs, which took some 20 minutes per unit, by automated industrial washers.

“The lug is washed in five minutes with this machine,” Marcelo del Popolo, the winery’s adviser on quality and environmental responsability, told Tierramérica. “We have reduced water consuption by some 60,000 litres a month. In three months of harvest, that’s 180,000 litres of water saved.

“And the water used in the washing process goes down a drain and is carried to a treatment plant, and is then used to irrígate the vineyards,” he said.

And irrigation systems are being improved in Mendoza, where 90 percent of water is used in agricultural activities, and where water shortages are increasingly severe as a result of global warming.

Wine storage tanks with special jackets maintain temperatures more efficiently in wineries in the wine-growing region of Luján de Cuyo in the Argentine province of Mendoza, which are taking part in a special programme to create more green-friendly processes to help combat the effects of climate change. Credit: Fabiana Frayssinet/IPS

“Our province basically depends on the water that comes from the snow up in the mountains, and all of the global forecasts and models indicate that there will gradually be less and less snow,” said Villalba, who is a member of the Intergovernmental Panel on Climate Change (IPCC).

The wine-growing industry, which represents six percent of GDP in Mendoza and 1.3 percent of GDP nationwide, also aims to reduce energy consumption, which in Argentina is responsible for 43 percent of greenhouse gas emissions.

In the wineries, energy is used for heating, cooling, pumping of liquids and lighting.

“In each one of these stages we can incorporate modifications of equipment or processes, which make significant energy savings possible,” Micic said. “From jackets on the tanks to maintain temperatures more efficiently to the installation of advanced new pumps for a stronger water flow and lower energy consumption, through the change of compressors and lighting.”

Del Popolo said: “We keep track here of the water that comes in and the temperature we manage to achieve. By doing this we have reduced the energy used for heating by 15 percent.”

The company also uses green-friendly materials like lightweight wine bottles and lighter boxes that use less cardboard. Plastic and other waste products like broken bottles are classified, recycled and reused.

“We’re using boxes that we have already recycled many times over,” he said.

The benefits to the environment also bring considerable cost savings.

“We have addressed two fundamental questions: savings in energy and in water. And in both of them, we’re also seeing significant economic savings,” said the head of the winery, which plans in the future to invest in a solar thermal system for heating and fermentation.

This, according to UNDP representative in Argentina René Mauricio Valdés, is what makes the project self-sustainable.

“Many people think investing in ecological practices has an additional cost and won’t necessarily bring the company any benefits. This shows that is not the case,” said Valdés during a visit to the winery.

Fincas Patagónicas Tapiz, an olive oil producer in the neighbouring department of Maipú, is another company taking part in the programme in Mendoza.

Among other measures, it implemented a system to circulate water heated by solar energy around the tanks of oil to eliminate that energy expense.

It also insulated the room holding the tanks of oil, to keep the temperature steady. This made it possible to avoid the need to use air conditioning in the entire plant, which consumed an enormous amount of energy.

“If the temperature of the oil drops below 14 or 15 degrees Celsius, it solidifies and I can’t filter it,” plant manager Sebastián Correas explained to Tierramérica. “Which means that in the (southern hemisphere) winter I have to keep heating the entire plant until the warmer temperatures of September and October make it possible to bottle the oil.”

Argentina is not one of the world’s top emitters of greenhouse gases. Producing 0.66 percent of all greenhouse gases released globally, it is 22nd in a ranking that counts the 28 European Union countries as a single bloc.

But Villalba, the scientific researcher, believes that Argentina, like Mendoza, has a role to play.

“We are going to have to prepare ourselves for this, for example to continue to be leaders in the production of malbec at a global level,” he said.

This story was originally published by Latin American newspapers that are part of the Tierramérica network.